The primary objective of the states monetary policy is to maintain price stability with sustainable maximum economic growth. In anticipation of higher inflation , the Central Banks raise short-term interest rate thereby to reduce money supply. Conversely, the Central Banks reduce short-term interest rate to inject additional money into the economy in apprehension of unleashing recessionary forces. The stock markets usually respond negatively to interest rate increases and positively to interest rate decreases. The linkages between money market and stock market a wealth effect due to a change in money supply disturbs the equilibrium in the portfolio of investors.
This index indicates the long-run and short-run dynamic effects of broad money supply (M2) on U.S. stock market (this symbol is optional (Bitcoin, Gold or Oil or other markets etc.)).
This Money Supply Index (MSI) by zdmre is available in BTC USDT and USDJP. BTC USDT and USDJP? In the following tw
Paul2005
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Hello bro, thank you for this indicator. I would like, if possible, more details on the correlation you make between an asset, whatever it may be, and the M2 money supply.
I tried to look into your code, but I don't really understand when or why this red or green dot will appear.
overbought (🔴): if the previous bar of msi was below 70 and the current bar is 70 and above.
oversold (🟢): if the previous bar of msi was above 30 and the current bar is 30 and below.
hope, it's ok now for you!
Yelian
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Thank you for sharing! I'm a bit confused, I figured the output of this script would be independent of whatever ticker (or the same for all tickers). Can you please explain how to interpret this script?
zdmre
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@Yelian, I didn't fully understand the question you asked, but this indicator corresponds to the correlation of the RSI indicator with the money supply. If you remove the "Symbol on Chart" checkmark in the settings, the indicator will be drawn based on the values of the "Relational Symbol" field. I hope I have explained it well.
Thanks for this indicator, playing around with it on btcusd! However if I plot the normal RSI beneath it, the RSI line seems to be pretty identical! Is there any noticeable difference?
zdmre
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@Fire01, Because the main variable affecting the index is Ticker Value. You can see the differentiation of the indicator by choosing a non-correlated stock, index, etc. instead of Money Supply in the settings.
This Money Supply Index (MSI) by zdmre is available in BTC USDT and USDJP.
BTC USDT and USDJP?
In the following tw